Katana Asset Management
Speculative Buy – Troy Resources (TRY) $0.225
TRY’s quarterly finally contained some positive news flow for patient shareholders. Production at Karouni has been set at up to 20 percent higher than prior guidance, grade and ore reconciliation is up substantially on budget and all-in sustaining costs have reduced further to $US550 versus the current gold price of $US1118.
Accumulate – Oil ($US33.62/barrel)
We are getting to the pointy end of the oil shake-out, with tangible evidence emerging that Saudi Arabia and Russia are preparing to engage (think “ROPEC”). While timelines are notoriously difficult to forecast, it is in every producer’s best interest to return to a level of production discipline, which would rapidly escalate the oil price.
Sell – Blackmores (BKL) $190.57
BKL was at $20 a share in February 2014; two years later it is trading at 10 times this price. The world has not changed this much, and euphoric stock increases inevitably encounter gravity and reality. While it remains possible that price momentum may take this stock even higher in the short term, valuations are stretched.